| AEROSPACE AND DEFENSE INDUSTRY NEWS DIGEST – UKRAINE, 1 JUNE 2011 |
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HIGHLIGHTS
DEFENSE INDUSTRY NEWS Ukraine’s government has reportedly developed a draft law on the conversion all Ukraine’s defense industry enterprises into state-owned corporations. This step is meant to provide clarity needed to further consolidate and integrate the sector. NATIONAL SECURITY & DEFENSE POLICY Ukraine’s Foreign Minister has requested consultations with Bucharest and Washington regarding recent U.S.-Romanian talks on deployment of the missile defense system to Romania. Foreign Minister Gryshchenko underlined that Ukraine supports a negotiated approach to addressing all political aspects of European security. 52% of Ukrainians support NATO’s operation in Libya, with 33% opposed, according to a Deutsche Welle - Trend poll. Attitudes toward NATO itself are more ambivalent: while only 13% of Ukrainians consider the Alliance as a threat, only 25% of Ukrainians support Ukraine’s jointing NATO. This figure varies considerably by region, with 51% of respondents in Western regions supporting NATO membership and only 12% in Eastern regions. A delegation from the NATO Parliamentary Assembly will visit Kyiv on 5-7 July 2011 for a meeting of the Ukraine-NATO Interparliamentary Council and a series of public seminars.The head of Ukraine’s Security Service noted that the country is considered a zone of high threat risk for terrorism, and that the service is strengthening its counter-terrorism efforts. Ukraine’s government plans to broaden the scope of the Armed Forces’ missions, to include fighting terrorism, anti-piracy operations, and countering drug trafficking. A draft law with the proposals has been submitted to parliament. The draft 2012 defense budget will allocate less than 1% of GDP for the needs of the Armed Forces, according to MOD. This year, Ukraine’s defense budget is 13,5 bln UAH ($1.7 bln). Defense Minister Yezhel has reportedly assured the Cabinet of Ministers that he will comply with government directives by reducing Defense Ministry staffing by 30%, from 1100 to 770 positions, including a reduction of 74 military posts. No time frame was specified. INTERNATIONAL CONSULTATIONS AND AGREEMENTS Ukraine’s Cabinet of Ministers authorized the signing of an agreement with Peru on collaboration in the aerospace sector. The agreement addresses consultation and cooperation between government agencies, industrial enterprises, research institutions and other organizations. The scope of the agreement includes R&D projects, sharing of technology and infrastructure, exchange of scientific and technical staff, cooperation in standardization and licensing, and technical assistance. OPERATIONS, EXERCISES, TRAINING, FORCE DEVELOPMENT The Secretary of Ukraine’s National Security and Defense Council has stated that a joint Ukrainian-Polish-Lithuanian brigade could be created by 2014. The comment was made during a joint press conference with the Head of Poland’s National Security Bureau. Ukraine’s parliament approved a resolution extending the participation of the country’s peacekeepers in the Côte d'Ivoire UN peacekeeping operation until 30 September 2011. [Some parliamentarians had claimed that the continuation of the Ukrainian deployment after the previous authorization expired on 4 April was a violation of law and the constitution. –Ed.] Russia reportedly reduced its participation in a joint naval exercise with Ukraine in favor of sending units to a NATO submarine search and rescue exercise. The Ukrainian-Russian exercise, Farvarter Myru [Peace Channel] 2011, was being renewed this year after an eight-year pause. The exercise took place in the Black Sea area on 23-26 May, with participation by units from the Ukrainian Navy and the Russian Black Sea Fleet (BSF), including fifteen combat ships, ten aircrafts and helicopters, and fifty armored vehicles. Russian press reported that Russia unexpectedly made a last-minute change in its participation, choosing to have the BSF’s only submarine and SAR ships participate in NATO’s Exercise Bold Monarch II (a submarine search and rescue exercise held May 28 – 9 June near Spain) instead of in Farvarter Myru. As a result, the program for the latter exercise was significantly shortened and sea trails of Ukraine’s Zaporizhzhyasubmarine disrupted. Former BSF Commander-in-Chief Admiral Komoyedov announced that Russia had abandoned Ukraine in favor of NATO. AIRCRAFT Ukraine’s civilian aviation fleet will be renovated by Ukrainian industry, according to a statement by Minister of Infrastructure Borys Kolesnikov during a visit to the state-owned Antonov design bureau. According to Kolesnikov, the Ukrainian Aviation Group Alliance and Ukraine International Airlines intend to lease up to fifteen An-148 and An-158 aircraft. He stated that the government should provide these companies better conditions for leasing aircraft than they currently have with Boeing and Airbus, as well as providing Antonov with stable financing. Antonov has stated that it plans to build five An-148/158 regional jet aircraft in 2011, pending adequate financing. The company plans to increase its production capacity to 24 aircraft per year over the longer term. Motor Sich’s Chairman of the Board praised the Ukrainian government’s effort to improve Ukrainian-Russian relations as having created new opportunities for joint projects in aviation and engine building. Among successes to date he highlighted cooperation with Russia’s United Aircraft Corporation (UAC), progress toward An-148 production and An-158 certification, as well as joint projects for the production of the An-70 and An-124. He noted that the Motor Sich-produced D-27 engine installed on the An-70 had been modernized and engine power increased. Three Ukrainian companies – Motor Sich, Azovmash, and the Progress machine-building design bureau – participated in 4th international helicopter industry exhibition HeliRussia-2011, held 19-21 May in Moscow. Overall, 161 companies participated in the exhibition from 16 countries, including Canada, France, Germany, Great Britain, Italy, Norway, and the US. ARMOR Ukraine’s Armed Forces are to purchase 300 and modernize over 240 armored vehicles by 2015. This reportedly includes purchase of KrAZ-6322 and KrAZ-5233VE off-road vehicles. SHIPBUILDING President Viktor Yanukovych attended the keel-laying ceremony for the lead ship of the Ukrainian Navy’s Corvette class (project 58250), held 17 May at the Chornomorsky shipyard (Mykolayiv). The President announced that four Corvette-class ships would be built through 2021, with the lead ship commissioned in 2014-2015. He also stated that the share of ships’ equipment coming from Ukraine should be no less than 60% and underlined that new tax code provides shipyards with exemptions from income tax and VAT preferences. Ukraine’s government has allocated 16 bln UAH ($2 bln) for the Corvette program. Ukraine’s President also noted during his visit to Mykolayiv that Ukraine and Russia are continuing negotiations regarding the latter’s potential purchase of the Ukraina cruiser (project 1164). India’s naval attaché to Ukraine visited the Chornomorsky shipyard(Mykolayiv) on 19 May to become acquainted with its production capacities for military and civil ships and meet with the shipyard’s leadership. SATELLITES & LAUNCH VEHICLES Ukraine’s parliament passed a law that clears the way for the restructuring of debt for the Pivdenny machine-building plant. The debt will be restructured using a loan from Colvis Finance Limited (UK), with repayment backed by a state guarantee. RADARS & SENSORS The state-owned Iskra scientific and production complex opened a 1.35 mln credit line with Russia’s PJSC VTB Bank. The bank was chosen on the basis of a tender. MISSILES & AIR DEFENSE Ukraine’s Ground Forces will be equipped with new air defense systems by 2025, according to the Chief of the Ground Forces’scientific centre. These systems will include the Poltava surface-to-air missile system, the Bars man-portable air-defense systems, the modernized Osa-AKMsurface-to-air missile system, and the Colibri man-portable air-defense systems. Ukraine and Azerbaijan will jointly produce the Ukrainian-designed Skif and Barrier anti-tank guided missile systems, according to Azerbaijan`s Ministerof Defense Industry. An Azerbaijani expert group reportedly visited Ukraine’s Luch design bureau (Kyiv) on 17-18 May. Azerbaijan reportedly selected the Ukrainian producer over Denel, South Africa’s largest defense equipment manufacturer, with which it had been previously negotiating. MUNITIONS On 25 May, the head of the Ukrainian Ground Forces’ Scientific Centre briefed the Defense Express professional journal on future weapons’ development. Projects include a precision-guided mortar, 152-mm precision-guided artillery munitions, remote mining munitions, and an automated reconnaissance system, among others. The state-owned Donetsk Chemical Plant took a credit line of 1.9 mln UAH ($237 thousand) from Ukraine’s Prominvestbank. The bank was selected based on a tender procedure. ================================== |
